Market rallies as EU unveils plans; GAAR clarified

Sensex swells 439 pts, closes at 17,430

Domestic equities rallied on Friday amid strong global cues after European leaders on day-1 at the EU Summit agreed that euro zone banks could be recapitalised without adding to government debt thereby soothing fears over growing credit strains in Italy and Spain.

Simply put, European leaders have agreed to take emergency action to bring down Italy and Spain’s spiralling borrowing costs.

At the same time, the Prime Minister’s Office clarified that the GAAR guidelines been put up on the government website from the official level of the Finance Ministry and shared with some stakeholders are only draft guidelines,  which hints on some tweaking or change in the final version, has underlined investor sentiment positively in D-Street.

These boosted the market sentiment and the BSE Sensex closed 439 points up at 17,430, its highest closing level since April 19, 2012. The 50-unit S&P CNX Nifty jumped 129.75 points or 2.52 per cent to settle at 5,279.

The market breadth was strong as all the 13 sectoral indices on BSE were in the green and index heavyweight Reliance Industries advanced. The day’s trade saw FMCG major ITC, pharma biggie Sun Pharma and private sector lender HDFC Bank scale record highs. As many as 1,890 shares on BSE gained and 1,015 shares declined while a total of 140 shares remained static after day’s trade.
Metal stocks too edged higher as global commodity prices rose, so were software pivotals after European leaders unveiled a plan to address Europe’s distressed banking sector.

Anand Rathi’s Vice-President (Equity Research) A K Prabhakar said “This EU summit was very keenly watched by the investors as the European crisis has been a long hang over on the markets and on the investor sentiments as well. So favourable announcements from them will boost the sentiments globally, including India.”

 Meanwhile in Asia, shares jumped more than 1 per cent after European leaders agreed that euro zone banks could be recapitalised without adding to government debt, soothing fears over growing credit strains in Italy and Spain. Nikkei added 1.5 per cent to 9,007. Hang Seng and Shanghai Composite 1-2 per cent each. In Europe too, shares were higher with France’s CAC and Germany’s DAX jumped 2 per cent each while Britain’s FTSE went up 1.3 percent.

Comments (+)